how do you find a stock that is good for short term trading?
what is your method for selecting a stock and then deciding when to sell?
thank you for all the helpful information. any more tips?
what is your method for selecting a stock and then deciding when to sell?
thank you for all the helpful information. any more tips?
April 26th, 2010 at 8:07 pm
my favorite to trade are Direxion Funds shares. They are triple leveraged ETF’s. I have had trememdous luck with them. You can read more about them at http://www.direxionshares.com
My favorite ones are FAS and FAZ (financial sector) FAS goes up when the market goes up, and FAZ is a bear fund, or INVERSE leverage fund. So when the market goes down, like the last few weeks since the short term rally after newyears, the FAZ bear fund goes UP. So either way, you have a chance to come ahead no matter which way the market goes.
here are some other Direxion triple leveraged shares:
Energy sector ERX (bull) and ERY (inverse or bear fund)
there are several others for the Russel small, mid and large cap, but particularly follow the same pattern of each other.
These shares have 300% leverage that are adjusted to perform 3x of the indicies which they portray. These are not meant for long term trading, and you need to set your stop loss as well. It is like trading stocks on steroids. An index 3% gain will now be a 9% gain. BUT a 3 % loss can be a 9 % loss as well. So it is very important to actually watch them or set trailing stops or stop losses in place. You might want to loosen the stops though because fluctuations of 8 to 10 percent between a high and a low are not uncommon, but you can use this to your advantage too. For example, pull up a chart on FAS. the last few days (today is jan 24th, 2009) the high was above 9 and the low was well below 8. The last 2 days I set my entry point for 8.00 and my sell point (stop limit order) for 9. I had two days consecutive that i made 10%
This is the best advice i can give for short term trading. Because of the 300% leverage, you can triple your gains. But again it is not meant for a buy and hold or long term.
These funds can be traded just like regular stocks. I reccomend scottrade because trades are only $7. Some say free or $4 but are tied with so many restrictions.
Good luck, these have been a blessing for me. These Direxion shares just got available in November, and since i heard about them in December, i don’t bother trading with anything else. The nice thing about ETF’s is you basically trade the indices. You cant get any more diversity than that!